Willis v. Litzler , 194 Fed. Appx. 187 ( 2006 )

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
August 2, 2006
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
Clerk
No. 05-10995
Summary Calendar
In The Matter Of: TIC UNITED CORP.
Debtor
----------------------------------------------------------------------
MITCHELL G. WILLIS
Appellant
versus
JOHN H. LITZLER, Chapter 7 Trustee
Appellee
Appeal from the United States District Court for
the Northern District of Texas
(USDC No. 3:05-CV-557)
_________________________________________________________
Before REAVLEY, BARKSDALE and STEWART, Circuit Judges.
PER CURIAM:*
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should
not be published and is not precedent except under the limited circumstances set forth in
5TH CIR. R. 47.5.4.
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We affirm for the following reasons:
1. Willis argues that the bankruptcy court lacked subject matter jurisdiction.
We disagree. Willis’ state court lawsuit was related to the bankruptcy case because “the
outcome of that proceeding could conceivably have [an] effect on the estate being
administered in bankruptcy.” In re Bass, 171 F.3d 1016, 1022 (5th Cir. 1999). Willis’
state law tort claims can affect the debtor’s bankruptcy estate by decreasing the amount of
available assets, i.e., the letter of credit or the cash, if the stay is lifted and litigation
pursued. Accordingly, the bankruptcy court had jurisdiction to issue the ADR order.
2. Willis also argues that his due process rights were violated because he did
not receive notice of the hearing on the trustee’s ADR motion. We disagree. While
notice was sent to Willis, it was originally sent to the wrong address. However, after
entry of the bankruptcy court’s ADR order, Willis was properly served with a “Notice of
Order Granting Trustee’s Motion For Approval of Mandatory Alternative Dispute
Resolution Procedure.” This notice was sent twice to the correct address. Accordingly,
Willis was aware of the trustee’s ADR motion and the bankruptcy court’s ADR order for
over seven months prior to filing his Rule 60(b) motion. Further, while Willis did not
have notice prior to the hearing on the trustee’s ADR motion, the other 200 or so
similarly situated claimants did. They appeared at the hearing and made the same
arguments that Willis would have made. Accordingly, remanding this case back to the
bankruptcy court would be futile.
3. Willis argues that the trustee failed to meet his burden to obtain an
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injunction against Willis’ state court proceeding. He also contends that he is entitled to
an adversary proceeding pursuant to Bankruptcy Rule 7001. The problem with these
contentions is that the bankruptcy court never enjoined Willis’ state court proceeding.
Rather, the bankruptcy court’s ADR order recognized that the debtor’s bankruptcy
petition gave rise to an automatic stay and required litigants with claims against the
debtor’s estate to make a good faith effort to resolve their disputes through the ADR
process before the court would consider a motion for relief from the automatic stay.
There is no injunction. Like the other 200 or so similarly situated claimants, Willis must
simply make a good faith effort to settle his dispute before the stay will be lifted.
4. Willis argues that the ADR order would require him to commit perjury.
This argument is baseless and, moreover, was never raised in the district court, and
therefore, waived.
AFFIRMED.
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